India recently concluded the Formula 1 Grand Prix successfully at Noida near Delhi. It was a grand success and went without a hitch. The racing circuit was endorsed by the key global racers as one of the best in the world.
While there are debates raging between the opposing camps – one which says it is a gross misuse of funds with no clear return on investment, and the other which says that India has truly arrived in the world’s premier sporting event – it is very evident from the success that private entrepreneurship is far better than government execution.
That statement is mostly true around the world. One reason which comes up clearly on the surface is that any government is not really geared towards running a business, or a sporting event for that matter. Governments around the world have mostly withdrawn from owning direct responsibility of running a business enterprise, though many might still have a controlling interest in several large enterprises. How can we expect to run a manufacturing industry, or a business using the services of government bureaucrats. I believe even public sector enterprises in India (majority-owned by Government of India through one of its ministries) should have at least a 50% representation by independent directors on their boards of directors. In some cases, it is not even 20%. We can all see the mess in Air India (now called “Indian”) – the flagship airlines of India owned by the government. Examples abound. Even in the sports arena, the world saw the Common Wealth Games (CWG) scandals in India last year: though the event itself happened without much of a problem, the corruption scandals tarnished the image of the Indian Government and the CWG institution.
In the case of Formula 1, the entire execution was by a private sector company, which obtained the license to run the Grand Prix from the Formula 1 Organizers, and the much-needed land from the Uttar Pradesh State Government (Noida is part of the state). There are several arguments in the Indian media that the company will not be able to recover the investment even after many years, and given the poor mindset on maintenance, the circuit would be wasted away in due course of time. What is the point in building such an expensive circuit, when it is going to be used just for a few days in a year ? Etc., etc.,
But the key point, Indians need to be proud, and there are very few things today that they can be proud of. When such a small city state as Singapore can host the Night Grand Prix so successfully for the past few years in the middle of its dense city, can India, a country of such vast proportions stand up and execute an ambitious project without corruption and with such perfection ? Yes, it can do so, if the executors are left to use their business sense and capabilities without unnecessary bureaucratic intervention.
Well, we can also argue till the cows come home, whether it was worthwhile to spend so much on an “elite” sport which very few people in the country understand or want to be involved in. Good question. Yes, most of even middle class must have come to know about the fact that a Grand Prix Formula 1 race is being held in India, only a few days before the event actually took place. One can also say that only the rich and famous, and the Bollywood celebrities were involved, and they were the only faces focused upon in the extensive media coverage last weekend. Yes, agreed on all the above counts. But all these observations do not detract from the excellent execution of a world-class project by private enterprise in India, and the Government of India would do well to learn from this experience and institute more public-private partnership events and enterprises to enhance the competitiveness of India on the global scene.
That would be a show-stopper, sorry, ground-breaking development in the long socialistic history of Independent India. It is not socialism, it is not capitalism, but it is “economic” partnership for ensuring the future of India.
6th November 2011